NFP Trading Guide for the Comdolls

It’s the last nonfarm payrolls (NFP) report of the year! If you’re a comdoll-lovin’ trader like me and you’re planning on trading AUD, CAD, or NZD, then maybe we can help each other out.

Since my USD/CAD retracement trade still isn’t showing any significant movement, I decided to discuss the NFP report’s impact on the comdoll pairs instead of adding my risk exposure ahead of the release.

AUD/USD

Let’s start with the Aussie! Last month when the NFP report came in at 171K instead of the expected 123K reading we saw AUD/USD jump by 30 pips in the first hour of the release. What’s interesting is that AUD/USD COMPLETELY retraced its move and actually closed 85 pips lower than its open price.

AUD/USD Trade Setup

If this tendency holds up, then we might see Aussie weakness if the NFP surprises to the upside again. But if the NFP comes in weaker-than-expected and the dollar falls, then AUD/USD might retest the 1.0550 handle, which was a former resistance area on the daily chart.

NZD/USD

Kiwi, on the other hand, had a little less pronounced reaction to the NFP. Around the time the previous NFP report was released, NZD/USD jumped from the .8250 area close to the .8275 mark, but was unable to sustain its rally for the rest of the U.S. session. Still, this goes to show that the pair reacted based on risk sentiment and not fundamentals during the most recent release.

NZD/USD Trade Setup

NZD/USD just made an upside breakout above the .8250 minor psychological resistance a few days back and is currently treading below the .8300 handle. A stronger than expected NFP figure on Friday could push the pair even higher while a weaker than expected U.S. jobs figure could trigger a selloff back to .8250.

USD/CAD

As for USD/CAD, the NFP report usually triggers a 50 to 70-pip move just after the release. When the October NFP came in stronger than expected, USD/CAD fell from the .9985 mark to .9935 instantly, before crawling even lower to .9920. This suggests that a stronger than expected result could spark risk appetite while a weaker than expected figure could spur dollar-buying on risk aversion.

USD/CAD Trade Setup

At the moment, USD/CAD is still stuck inside a range on the 1-hour time frame, possibly awaiting the release of employment data from both U.S. and Canada tomorrow. Don’t forget that Canada is set to print its jobless figure at the same time as the U.S. will release its NFP so we might have extra volatility around that time.

Of course, these potential price reactions are only tendencies based on past price patterns. Make sure you do your homework and research on other potential scenarios before committing to a particular direction. And hey, if trading the news ain’t your cup of tea, better just watch from the sidelines!

Do you have any trade ideas for the upcoming NFP release? Care to share them with me and our comdoll buddies? Don’t be shy to post ‘em right here!

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Have fun and good luck trading this week, friends!

Happy time

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